Auditing and assurance includes a broad range of services that are provided by accountants and consultants. We often think of auditing in three ways. Typically, auditing refers to the financial audit of a public company's financial statements. These audits are conducted by independent external auditors who must provide an opinion about a company's financial reports. These auditors must adhere to Generally Accepted Auditing Standards (GAAS) in the United States, and their opinions give investors reasonable assurance that a company's financial reports are true, fair, and adhere to applicable accounting standards. A financial auditor must also include an opinion about the effectiveness of a company's internal controls.

Secondly, auditing may refer to forensic auditing. Forensic auditing looks at reviewing previous financial information in the case of disputes or litigation; for example, in the case of suspected tax evasion; in the case of bankruptcy, insolvency, or reorganization; in the case of fraud or suspected fraud; or when one party is seeking economic damages as a result of a tort or breach of contract claim.

Thirdly, we can think of auditing by looking at the broad range of other services that accountants and consultants provide to businesses. Companies can hire an outside firm (an external auditor) or employees (internal auditors who are employed by the company directly) to provide feedback on the firm's processes, procedures and performance in specific areas. The list of services that auditors can provide is endless: they may provide valuations and assessments; they may look at the firms regulatory compliance and associated risks; or they might even look at the firm's energy consumption and environmental impact. When these services include a formal opinion about a company's policies, procedures or performance, we call this assurance. Assurance services over and above the traditional financial audit or forensic audit are an important part of the auditing industry.

Categories within Auditing

External auditing is the practice of reviewing a firm’s financial statements and internal controls in order to provide an opinion on the truth and fairness of a firm’s financial information and the effectiveness of a firm’s internal controls over financial reporting. In the United States, only certified public accountants (CPAs) can perform audits and provide these opinions.

In addition to external audits, accountants provide a variety of other auditing and insurance services. Many firms employ internal auditors or hire external accounting firms who provide feedback on the firm’s processes, procedures and performance in specific areas.

Forensic accounting is the practice of reviewing a firm’s financial reports and other financial information for use in legal disputes. Forensic accounting is typically performed in cases of suspected tax evasion; bankruptcy, insolvency or reorganization; suspected fraud; or civil litigation.

Management will typically have a conservative view on contingencies and be hesitant to report them in the financial statements. They may feel that the disclosure of contingencies could lower stock prices and lead to lawsuits. As an auditor, you should look for contingencies and make sure they are properly reported. The proper ac

CPAs that act as tax advisors are responsible for ensuring that their clients pay the proper amount of income tax. In other words, the clients should pay no more tax than he or she legally owes. While CPAs acting as tax advisors are not held to the same level of independence standards as those CPAs performing attestation work,

Hi please help me to answer this question before 1/17/2016. Thanks.
subject:
CAFR of State of Washington for Fiscal Year Ended June 30, 2015
Comprehensive Annual financial Report (CFAR) starts with introduction section consisting of letter of transmittal which discusses profile of Washington State. It discloses the governm

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Among the vast number of changes, there is good news. Dodd- Frank permanently relieves smaller public companies from the requirement of providing auditor attestation under Section 404 of the Sarbanes-Oxl

3.6 Madoff Investment and Securities: Understanding the Client's Business and Industry
Synopsis During 2008, Bernie Madoff became famous for a Ponzi scheme that defrauded investors out of as much as $65 billion. To satisfy his clients' expectations of earning returns greater than the market average, Madoff falsely asserted that

The megabanks hold a total of about $210 trillion dollars in derivatives, nearly all of which are not traded on transparent exchanges but instead are traded over the counter (OTC). Zero Hedge recently posted an illuminating blog entry on the business of derivatives trading and profit manipulation at the banks. According to Zero

The Baptist Foundation of Arizona: Related Party Transactions
Synopsis The Baptist Foundation of Arizona (BFA) was organized as an Arizona nonprofit organization primarily to help provide financial support for various Southern Baptist causes. Under William Crotts's leadership, the foundation engaged in a major strategic shift i

Respond to following:
1. Find a recent CPA case where the member was expelled (it's public information) and discuss the reasons why the member got in trouble.
Sharon Hart of Glen Allen, Va., effective Dec. 31, 2011
In this case, the member was expelled because she failed to comply with corrective actions that were either educ

Bernard L. Madoff Investment and Securities: A Focus on Auditors' and Accountants' Legal Liability
Synopsis During 2008, Bernie Madoff became famous for a Ponzi scheme that defrauded investors out of as much as $65 billion. To satisfy his clients' expectations of earning returns greater than the market average, Madoff falsely

2.3 WorldCom: Professional Responsibility
Synopsis On June 25, 2002, WorldCom announced that it would be restating its financial statements for 2001 and the first quarter of 2002. Less than one month later, on July 21, 2002, WorldCom announced that it had filed for bankruptcy. It was later alleged that WorldCom had engaged in i

In 2014 there were 724 disciplinary cases opened and 113 CPA's expelled from the profession by the AICPA and State boards, compared to 90 in 2013. Besides breaking the CPA ethics rules, a CPA can get lose their license for a certain period of time (suspended) or permanently (expelled) due to many acts including committing a fe

1. Does the PCAOB actually follow the FASB standard setting procedure? ie. do they create standards?, or are all the standards created by FASB and approved by PCAOB? how do they work together?
Respond to following statements:
1. What is the AICPA's process for issuing a new standard?
To create a new standard the AICPA follows

Bernard L. Madoff Investment and Securities: The Role of the Securities & Exchange Commission (SEC)
Synopsis During 2008, Bernie Madoff became famous for a Ponzi scheme that defrauded investors out of as much as $65 billion. To satisfy his clients' expectations of earning returns greater than the market average, Madoff falsely

From the Journal of Accountancy: ASB addresses audits of ICFR integrated with financial statement audits, By Ken Tysiac October 27, 2015
The AICPA Auditing Standards Board (ASB) issued a new standard Tuesday to establish requirements and provide guidance that apply only when an auditor is engaged to perform an audit of intern

1. The challenge with internal controls is that it is not always the line staff that break the controls. Most often, the person committing fraud is a manager responsible for the internal controls - someone with the authority to override the whole system. In this case, how do ensure that internal controls are in place? Also, do

Qwest: The Revenue Recognition Principle
Synopsis When Joseph Nacchio became Qwest's CEO in January 1997, the company's existing strategy began to shift from just building a nationwide fiber-optic network to include increasing communications services. By the time it released earnings in 1998, Nacchio proclaimed Qwest's successf

1. What are the major risks an auditor could encounter when planning an audit and how can this be avoided?
2. What is the definition of a material misstatement and how can this lead to conflict between the auditor and the client?
3. Is an auditor responsible for detecting fraud, or just making sure that the financial statement

QUEST: THE FULL DISCLOSURE PRINCIPLE
Synopsis When Joseph Nacchio became Qwest's CEO in January 1997, the company's existing strategy began to shift from just building a nationwide fiber-optic network to include increasing communications services. By the time it re- leased earnings in 1998, Nacchio proclaimed Qwest's successful

Bernard L. Madoff Investment and Securities: Broker-Dealer Fraud
Synopsis During 2008
Bernie Madoff became famous for a Ponzi scheme that defrauded investors out of as much as $65 billion. To satisfy his clients' expectations of earning returns greater than the market average, Madoff falsely asserted that he used an innovati

Respond to following questions and answers.....elaborate more
1.
1. From the Key Players: Why is it important for the auditor to report to the audit committee?
The audit committee oversees the work of the auditor. They select the auditor, the amount they earn, and oversee the tasks the auditor completes. The audit

1. From the Key Players: Why is it important for the auditor to report to the audit committee?
2. If the CPA auditor's spouse is a senior manager at the company to be audited, does the auditor have independence
3. What is the PACOB and why is it important for CPA's?
4. Give an example of an Audit firms systems of quality co

Newham, Inc.
Test of Controls Results - Revenue
December 31, 2015
Of the 213 sales transactions examined, 82 "deviations" were identified:
• No credit approval was found on 42 sample items
• The wrong quantity billed was identified on five sample items
• There was a mathematical error on 10 sample items
• No s

The ultimate purpose of ERM is to increase shareholder value through a risk-return based strategy. I need to outline the following issues:
• Identify the various stakeholders and outline what performance measures each of these groups consider important.
• Explain why, as part of an ERM system, communicating performance

See the attached file.
Question (2) — Financial Ratios and Fraud
The following are independent fraud schemes. For each scheme indicate which of the below financial ratios could alert the auditor by an unusual increase (INC) or decrease (DEC) and provide and explanation for your answer. Each scheme might affect some or al

Need help with answering the questions
Prior to Sarbanes-Oxley, auditing companies had engaged in non-auditing functions with the corporations they audited. Although this had been cause for concern by the SEC, rules were not promulgated until mandated by Sarbanes-Oxley. Now, auditing companies are forbidden to perform non-aud

QUESTION: Identifying Deficiencies in an Audit Report
An audit report prepared by Singh and Rampersad, CPAs, is provided below. The audit for the year ended December 31, 2013 was completed on June 10, 2014, and the report was issued to CLICO Ltd, a private company, on June 30, 2014. List any deficiencies in this report without

1. Explain why the emphasis in auditing property, plant, and equipment is on the current period acquisitions and disposals rather than on the balances in the account carried forward from the preceding year. Under what circumstances will the emphasis be on the balances carried forward?
2. Explain why a proper cutoff of purc

The following statements are typically found in a questionnaires used by auditors to obtain an understanding of internal control in the acquisition and payment cycle. In using the questionnaire for a client, a "yes" response to a question indicates a possible internal control, whereas a "no" indicates a potential deficiency.

Problem posted:
As part of the audit of different audit areas, auditors should be alert for the possibility of unrecorded liabilities. For each of the following audit areas or accounts, describe a liability that can be uncovered and the audit procedures that can uncover it:
a. Minutes of the board of directors meetings
b.

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